Intel chief to chop workforce?

Intel may be about to take an axe to its employee roster as the chip giant strives to become "leaner, more agile and more efficient", the goal of a major restructure announced by CEO Paul Otellini last night. It will be the firm's biggest shake-up since the mid-1980s, he claimed.

"No stone will remain unturned or unlooked at," he said. Company executives will spend the next three months examining the business for under-performing or inefficient operations, he added without going into details.

"In terms of non-performing businesses, anything with a bracket will be looked at," Otellini said, a reference to the way losses appear in brackets on US company balance sheets.

Lay-offs so seem to be part of the plan: "It would be too simplistic to simply do a reduction in force," Otellini said, surely implying the business review will come in addition to job cuts.

The announcement comes a week after Intel reported a 38 per cent drop in first-quarter income. Sales were down five per cent. Then, the company said it would seek to reduced its operating expenses by $1bn through the remainder of the year. Otellini yesterday re-iterated last week's forecast that annual sales will fall around three per cent, from last year's $38.8bn to $37.6bn.

"We are very well aware of the realities of our current and future business outlook and we are taking actions to address these realities," Otellini told an analysts.

In January 2005, Intel restructured its business units the better to align its operations to the platforms the company is nowadays promoting. The autonomous operating units include Digital Enterprise, Digital Home and Digital Health Groups, along with Mobility and Channel Products Groups. ®